Brussels: The European Union on Tuesday proposed a new round of sanctions against Russia over its ongoing war in Ukraine, targeting financial institutions, energy networks, military supply chains and companies in several countries, including India and China, that it alleges are helping support Moscow's military-industrial sector.

The proposed 21st sanctions package was announced by EU High Representative for Foreign Affairs and Security Policy Kaja Kallas, who said the measures are designed to further undermine Russia's ability to finance and sustain its military operations.

"Brick by brick, we are collapsing the foundations of Russia's war economy," Kallas said.

According to the proposal, the EU plans to maintain pressure on Russia's energy revenues through a temporary freeze of the oil price cap mechanism while also imposing sanctions on entities accused of helping Moscow circumvent existing restrictions.

"We are intensifying our sanctions efforts against individuals and entities that enable Russia's war against Ukraine," Kallas said.

The package includes restrictions targeting banks, weapons manufacturers, oil traders, refineries and cryptocurrency operators. More than 170 new listings have been proposed, making it the largest sanctions expansion put forward by Kallas' office in over two years.

"As part of this package, my services are putting forward the largest set of listings in over two years, with over 170 proposals, notably on the financial sector, energy and drones' production," she stated.

India, China firms among new targets

A significant element of the package focuses on companies outside Russia that the EU alleges are supporting Moscow's defence and industrial capabilities.

Kallas said export-control measures are being proposed against 50 companies located across several countries, including India, China, Turkiye, Kyrgyzstan, Kazakhstan and the United Arab Emirates.

"We are also targeting companies providing support to Russia's military-industrial complex. The new listings will cover more than 30 designations in the drones manufacturing as well as new export control measures on 50 companies, including entities based in China, Turkiye, Kyrgyzstan, Kazakhstan, UAE and India," she said.

The measures would further tighten restrictions on exports of materials considered critical to Russia's defence sector, including nickel powders, speciality metals and high-performance alloys.

The EU is also seeking to expand restrictions on Russia's banking system by freezing assets linked to nearly 90 banks and introducing additional transaction bans affecting more than 30 banks in Russia and other countries.

"We intend to deal a heavy blow to Russia's financial sector, imposing asset freezes on close to 90 banks and additional transaction bans on over 30 banks in Russia and other third countries. We will also tighten our ban on crypto-asset services to certain third countries, add new designations, and ban transactions on 11 crypto platforms," Kallas said.

Energy, Shipping and Visa Restrictions Expanded

The proposed sanctions would further target Russia's energy exports by restricting the resale of LNG tankers and maintaining pressure through the oil price cap framework.

"Energy sales keep Russia's war machine running. We want to cut this cash flow," Kallas said.

The package also broadens measures against Russia's so-called "shadow fleet", with 30 additional vessels proposed for sanctions. Under the new rules, ships that supply or refuel sanctioned vessels could themselves face restrictions.

"Our work on curbing the operations of Russia's shadow fleet continues, with 30 new vessels sanctioned, proposals for new designations of enablers, and the expansion of our criterion for vessels listings," she stated.

In addition, transaction bans have been proposed on two Russian ports and four airports. The package also includes a comprehensive visa ban on current and former members of the Russian armed forces and affiliated proxy groups.

Kallas noted that these measures would come in addition to 81 listings expected to be approved by the EU Foreign Affairs Council next week, targeting Russia's shadow fleet, military-industrial network, propagandists and alleged human rights violators.

The sanctions package will now be reviewed by EU member states before a final decision is taken.